CVIndependent

Sun11182018

Last updateTue, 18 Sep 2018 1pm

The Agua Caliente Band of Cahuilla Indians made it perfectly clear to the city of Palm Springs: The tribe strongly objects to Measure C, the ballot initiative that would effectively ban vacation rentals, which will be decided on by Palm Springs voters on June 5.

“The tribe is concerned that this ban is onerous and unnecessary restriction of the use of allotted trust land,” said the letter from Tom Davis, tribe’s chief planning and development officer, hand-delivered to City Manager David Ready. “The complete prohibition of vacation rentals in R1 zones is an extreme action that will likely only serve to drive this activity ‘underground.’”

According to city records, approximately 770 of the 1,986 permitted short-term vacation rentals are on tribal land. As a sovereign nation, the tribe does not need to implement any of Palm Springs’ ordinances when it comes to properties built on its reservation.

After sharing the letter with me, Davis—who started working for the tribe more than a quarter-century ago, when current Chairman Jeff Grubbe was still in high school—agreed to an email interview.

What is the main concern for the tribe regarding the possible ban on short-term rentals in Palm Springs?

The tribe believes that a total ban on short-term vacation rentals is overly restrictive and, in certain cases, contrary to the principle of highest and best use of allotted trust land.

What are the tribe’s legal options in the case?

Land-use regulation is under the tribe’s sovereign authority. However, allotted trust lands in Palm Springs, Cathedral City, Rancho Mirage and parts of the county are subject to our land-use agreements with those jurisdictions. These land-use agreements allow for local jurisdictions to regulate land use, and all decisions are appealable to the Tribal Council for final decision.

You have been with the tribe for decades. Has there ever been a situation like this before?

Nothing specifically like this. However, in 2004, there was a referendum of the city’s rezoning of “Section 14,” a square mile in downtown that is reservation land master-planned by the tribe and rezoned in cooperation (with) the city. The referendum was sponsored by labor unions. A “yes” vote approved the City Council’s decision, and it passed.

On a brighter note, the tribe just announced plans for a new downtown Palm Springs cultural center.

The tribe invites the community to its groundbreaking at 9 a.m., Friday, May 11, of its new 5.8-acre cultural center in the heart of downtown Palm Springs that celebrates the history, culture and traditions of the Agua Caliente people.

What is the timeline for finishing the project?

The groundbreaking will be at the corner of Indian Canyon Drive and Tahquitz Canyon Way, and kicks off a two-year construction cycle to build a new cultural museum; an Agua Caliente Spa and Bathhouse that celebrates the tribe’s ancient Agua Caliente hot mineral spring; a gathering plaza; gardens; and an Oasis Trail. The project is on target to open in 2020.

Simultaneously, the tribe is making plans for an expansion of the Agua Caliente Casino in Rancho Mirage. More on that?

The tribal environmental impact report will study the potential environmental impacts of an expansion of the resort that may include expanding the gaming area by up to 58,000 square feet; meeting space by up to 41,000 square feet; the food, beverage and retail space by 25,000 square feet; and the development of up to 310 new hotel rooms in 364,000 square feet of hotel space. About 120,000 square feet of new commercial space is also being considered to the south of the resort. Like any environmental analyses, the tribe’s environmental report will study the maximum development potential and use that information to refine the project.

There are also plans for a new casino in Cathedral City.

The tribe proposes to build a gaming facility and ancillary amenities on land that it owns contiguous to the tribe’s reservation within the city of Cathedral City. As part of the proposed project, an application has been filed with the Bureau of Indian Affairs to take approximately 13 acres of land into trust on behalf of the tribe for gaming purposes. The federal actions necessary to implement the proposed project trigger the requirements of the National Environmental Policy Act. The tribe proposes to develop and operate a gaming facility and ancillary amenities on the project site, which has been previously developed. The proposed project is planned to be designed and constructed in multiple phases and ultimately consists of the development of a casino, parking, bars, restaurants, retail and mixed-use space, and tribal government office space.

Published in Local Issues

It’s official: Palm Springs now has the highest sales tax in Riverside County. Thanks to newly approved Measure D, the rate will be 9.25 percent. The half-cent sales-tax hike will bring in an extra $6.7 million annually, according to estimates.

Voters in November also approved Measure E, a new tax on recreational marijuana.

These new revenues will be coming into city coffers along with, among other revenue sources, funds from Measure J, the one-cent sales tax increase approved by voters in 2011.

Measure J has indirectly led to a lot of bad publicity for the city—because some of those funds were and are being used for the now-coming-to-fruition downtown redevelopment project that was embroiled in the shady dealings that led to the arrest of developer John Wessman and former Mayor Steve Pougnet on bribery charges.

With an entirely new City Council taking office over the last two years, it’s worth taking a look at those Measure J funds, as well as the whole city budget—a budget that is, according to many observers, not so transparent and very hard to understand.

Palm Springs, with 47,000 residents (and a lot of visiting tourists), has a general-fund budget of $110,130,162 for the fiscal year 2017-18. However, the city’s various special funds actually total more than the general fund—bringing the total fiscal-year budget to $229,966,656, an amount confirmed by City Attorney Edward Kotkin, although he added that the amount has yet to be audited.

Figuring out what’s going on with all of these special funds is nigh impossible. I spent several weeks trying to get information from the city’s director of finance and treasurer, Geoffrey Kiehl. After not getting a response, I reached out to Councilman J.R. Roberts.

Roberts said there are 64 separate special revenue funds. “I had to look that up,” he said.

Why are there so many funds—totaling an amount more than the general fund?

“Unlike most cities in the valley, Palm Springs has an airport, a sewer treatment plant, a convention center, etc.,” Roberts said.

Of course, having so many separate funds raises questions about transparency and fiscal responsibility. Roberts responded that city’s website OpenGov website is easy to navigate. He also pointed out that Measure J funds are under the strict supervision of its oversight committee.

“Once the Measure J oversight committee has made its recommendations, the money is moved to the various projects that were decided upon,” he said.

However … if everything concerning the city’s use of Measure J funds is clearly posted on the city website, how did the fund end up getting FBI attention, including a raid at City Hall? Robert Stone, a self-proclaimed FBI informant and constant city-government critic who unsuccessfully ran for the City Council this year, said one of the problems is that the public is only able to find out how the funds were spent after the fact.

“The Measure J funds are controlled by the city manager and the council, with recommendations from the Measure J Committee,” Stone said. “The reasons behind who gets what are not always clear, and disbursements are pretty much at the discretion of the city manager for smaller disbursements, and council for the larger disbursements.

“We only find out how the funds have been administered at the end of the fiscal year,” Stone said. “We never know in advance where the Measure J money is going. We only find out as the transfers are made.”

As for the new Measure D funds: In their pitch to voters, city officials claimed the funds would help the city maintain essential city services, such as public safety. However, it’s unclear what the city will do to handle its huge long-term pension obligations.

“Measure D does nothing to address the ongoing $220 million unfunded pension and health care liability of the city,” Stone said, claiming that the burden from pension and health-care liabilities will bring the city to its knees if it does not fundamentally change the way it does business.

One common complaint about the city budget: generous salaries. In recent years, Palm Springs City Manager David Ready has been the Coachella Valley’s highest-paid public official, with salary and benefits totaling more than $420,000. However, the problem extends well beyond Ready: According to TransparentCalifornia.com, 68 city of Palm Springs employees earned more than $200,000 in pay and benefits in 2016—and when these employees retire, they’ll be in line for huge pensions. Councilman Roberts confirmed that former Palm Springs Police Chief Al Franz, who retired in December 2015, is receiving a pension of $189,083 per year.

In other words … when it comes to transparency and getting the city budget under control, the all-new Palm Springs City Council has a lot of work to do.

Published in Local Issues

A Palm Springs City Hall power struggle involving freshman Mayor Rob Moon and longtime City Manager David Ready seems like a classic David vs. Goliath battle.

In this case, the mayor is playing the underdog role of David, while the role of mighty Goliath goes to Ready. Since 1994, according to the city charter, Palm Springs has basically been run by the city manager, while the role of the mayor is largely ceremonial: He’s just another City Council member who also gets to cut ribbons, greet dignitaries, attend events, give speeches and so on.

However, that does not mean a mayor has no power whatsoever: A mayoral term is four years long, which offers plenty of time for a motivated mayor, if he so chooses, to put the pressure on the City Council to use its power to fire the city manager.

That’s exactly what Moon proposed, more or less, back in April, when Moon called a special meeting to evaluate the performance of Ready and Doug Holland, a contractor who serves as the city attorney. Moon’s proposal came in the wake of a turbulent year during which the city was dragged into an FBI investigation.

However, Moon soon learned that he was the only council member who supported removing the city manager. After a closed session on April 13, the City Council voted unanimously to keep Ready.

Today, the power struggle continues—and Moon is now saying he wishes he’d stood his ground and voted to fire Ready.

“I wanted the City Council to go on the record,” Moon said. “I did then vote to endorse the city manager, but I regret that vote. I should have stood my ground and at least made a symbolic vote against it.”

Since becoming city manager in 2000, Ready has largely reigned unchallenged during the terms of four mayors: Will Kleindienst, Ron Oden, Steve Pougnet and now Moon.

Ready offered a diplomatic response to the “evaluation” of his job performance that Moon initiated.

“It is the prerogative of the mayor and any member of City Council to discuss my employment contract,” he said, “and as always, I serve at the will and pleasure of the City Council.”

Ready earned $421,221 in pay and benefits last year, making him the highest-compensated city government employee in the Coachella Valley—and one of the highest-paid city managers in the state. I asked Moon what he thought about capping the city manager’s salary.

“That’s probably a good idea,” Moon said. “… But if there is a cap, perhaps a person who has been around a long time would not like it and would go to work in a big city, like Chicago.”

While Ready’s salary has increased over the years, he said he’s made some personal sacrifices when it comes to his pay. 

“With regard to salary increases, in several years, I have refused to take increases outlined in my contract as we went through the recession,” Ready said. “Hence, salary or salary caps are not an issue for me, personally.”

Both Moon and Ready said they’re awaiting the results of the ongoing probe into city affairs—apparently involving the conduct of former Mayor Steve Pougnet.

“The FBI, the IRS and the (district attorney) seized certain documents, servers, cell phones etcetera,” Moon said. “I’ve no idea what they were looking for. … I expect that sometime by end of this year, my guess, we’ll hear what the outcome of the investigation is.”

Ready said the city has been transparent throughout the investigation and added that documents removed during the raid have been returned and posted on the city’s website for public review.

“Those agencies were doing their jobs,” Ready said about the law enforcement agencies investigating the city. “The city is fully cooperating with the investigation, and we are committed to keeping our citizens and the public updated on any information that we receive.”

However, the city has indeed suffered from some lapses in transparency. Shortly after the Sept. 1, 2015, FBI raid, former Riverside County District Attorney Rod Pacheco—despised by some members of the community thanks to his hard-line role in a 2009 Warm Sands area sex sting that was tinged by homophobic remarks—was hired to “assist” the City Council in the matter. However, that information was not released to the public until this spring—after Ready at one point told The Desert Sun that the city had not hired outside legal help.

Moon said he was shocked when he learned the city had hired Pacheco.

“Right after I was sworn in, we had a closed-session meeting, and Mr. Pacheco was introduced to the new council,” Moon said. “Once I found who he was, I felt that it was inappropriate for us to be employing him, even indirectly. I was one of those people who very strongly led a movement to cut any ties with him.”

Ready said it was not his idea to hire Pacheco in the first place, and instead pointed a finger at City Attorney Doug Holland.

“The city attorney decides to hire outside legal services,” Ready said. “In this case, in order to fully cooperate with the district attorney, the city attorney indicated his decision to hire Mr. Pacheco was based on his extensive knowledge and understanding of the operations and procedures within the District Attorney’s Office.”

Moon is now leading a charge to replace the existing contracted city attorney with an in-house city attorney. Moon is on a city subcommittee working with recruiting firms to find a new city attorney.

“It’s been approved by the City Council, and it’s in the budget,” Moon said. “I’ve strongly felt that we need a city attorney to be a member of our team—actually employed by the city. I would like to get it done in six months.”

Ready said he is indifferent regarding the issue, and added that the matter is out of his hands.

“As with the city manager’s position, the city attorney is a position that is hired by the City Council,” Ready said.

Published in Politics

A bottle, perhaps two, of Barolo might have helped cost the city of Palm Springs a fortune.

The Italian red wine was served during a meeting in 2010 between Steve Pougnet, then Palm Springs’ mayor, and developer John Wessman. Before the meeting, Pougnet had publicly talked about filing eminent-domain proceedings against Wessman’s Desert Fashion Plaza—which the developer had kept largely empty for almost a decade.

The following day, at the State of the City luncheon, Pougnet announced a deal with Wessman and a “new downtown vision that will benefit all of Palm Springs and the valley.”

The bond between Pougnet and Wessman grew after that. The mayor was hired to work for the Palm Springs International Film Festival—which has long included Wessman as a board member and vice chair. IRS records show that the Palm Springs International Film Society, the nonprofit that runs the festival, paid Pougnet $37,500 in the fiscal year 2011-2012, while Wessman Development Co. was paid $90,638 for building rent.

That was not the first time Pougnet and Wessman would find their financial interests linked.

In 2012, according to public records, Wessman purchased a property at the foot of the Tramway Road for $1.1 million. The property, known as Pedregal, was once owned by developer Dennis Cunningham, who lost the development. In addition, the City Council, led by Pougnet, awarded Wessman $4 million that Cunningham owed in bonds on the property.

The high-profile FBI raid of Palm Springs City Hall on Sept. 1, 2015, gathered documents and other evidence regarding Pougnet’s deals with developers, including Wessman. But beyond the ongoing scrutiny and the corruption probe, Wessman finds himself busier than ever.


Despite his high profile, Wessman remains an enigma: Not much is known about the man himself. His age is even hard to pin down; a Palm Springs Life article from May 1980 said he was 40 then; if accurate, that would make Wessman now 76 or so.

Wessman—who did not directly respond to requests to speak to the Independent—grew up on a farm in Hemet, surrounded by his six brothers and Swedish-born parents. As a teen, he worked in construction and never finished a college.

In 1964, he was employed by a construction company owned by Warren Coble and Arthur Press. A year later, Wessman bought out Press, and in 1972, he parted with Coble as well.

He’d soon develop one of the most unusual—and profitable—developing philosophies the valley has ever seen. In that aforementioned Palm Springs Life piece, he stated: “… I make more money from keeping property than I do by building and selling.”

The most prominent example of Wessman’s business strategy can be found smack-dab in the midst of downtown Palm Springs. It all started with the Desert Fashion Plaza, which he managed to keep largely vacant after purchasing it in 2001. Over the years, he held on to the property—and wore down many of his critics, a group that at one time included Pougnet.

Then in 2011, Palm Springs voters approved Measure J, a 1 percent increase in the city sales tax slated to be used on various city projects. Soon thereafter, the Palm Springs City Council, lead by Pougnet, opened the city’s wallets for Wessman Development Company.

“In the initial round,” said local real estate broker Robert Stone, “he got $32 million in public funds to help with the private improvements to the Desert Fashion Plaza parcel. It was simultaneously accompanied by another $11 million for streets, sidewalks and infrastructure improvements that are typically a developer expense.

“Then there were a bunch of change orders to the original giveaway,” Stone said. “When Wessman failed to provide adequate open space as required by the city’s specific plan for the site, the city bought a large parcel from him and made it permanent open space. They paid him $5.3 million for it, based on an appraised value which considered the value of the parcel if fully developed.”

One of the key elements of Wessman’s development is a Kimpton Hotel, rising quickly where the Fashion Plaza once was. However, Wessman has never built a hotel before.

“The 155-room Kimpton Hotel is our first hotel project,” said Michael Braun, the senior vice president at Wessman Development Co.

According to Braun, who’s also Wessman’s son in law, the Kimpton will be first new relevant large hotel in Palm Springs since 1988, when what is now the Renaissance was built.

Wessman recently announced plans to build yet another significant hotel downtown: a 150-room Virgin Hotel. Some opponents of Wessman’s project have expressed concerns about density, traffic and parking space for the proposed 69-foot-tall hotel. According to Braun, there is no problem.

“Based on current approvals, the downtown site has more parking spaces than required,” Braun said.

Another problem is the current occupancy rate for Palm Springs hotels, which is less than 60 percent. Additionally, other hotels may be built soon, including one by the Agua Caliente tribe on its downtown property.

Again, Braun said there was no problem. “You have to distinguish between various hotel-product offerings,” he said. “Palm Springs needs several new four-star products to attract a different tourist segment. The … occupancy rate is irrelevant, as it relates to all product offerings in Palm Springs.”

According to Judy Deertrack, a local urban lawyer, the downtown project morphed over time into something quite different than what was in the original plan.

“There has been no attempt at a market study or feasibility study since 2011, even though the project has grown from an expected $110 million in construction costs to its current estimate of $350 million,” Deertrack said.

“All the way through, the downtown development has shown a lack of public hearings and transparency, (and an) inappropriateness (in) the way the entitlements have gone through on the consent calendar and new business agenda without public notice, hearings and citizen review,” she said.

Over the years, Wessman has been associated with at least 44 companies, according to public records; 33 of the companies are still active.

“About five years ago, I did a search to find out how many parcels Wessman owns personally or in conjunction with other investors under his many DBAs,” Stone said. “At that time, he owned 135 properties in the valley. They were all commercial properties or unimproved land.”

Deertrack expressed serious concerns about the ongoing FBI investigation.

“The elephant in the room,” Deertrack said, “is the connection between the ongoing public corruption investigation, for possible fraud or undue influence, and the extraordinary entitlements granted to Wessman. The cities are prohibited from granting contracts or land entitlements to a developer or party who is a source of income to any City Council member, the mayor included.”

As for the FBI probe, Braun had only this to say: “It is company policy not to comment on any ongoing investigation.”


Meanwhile, Pougnet is no longer part of the City Council. While the new council slate seems to be keeping a more watchful eye on Wessman’s project, new Mayor Rob Moon said via email that construction will definitely continue.

“At our last City Council meeting, our council agreed unanimously that we were not content with continuing to ‘kick the can down the road’ on the downtown development. As I said at that meeting, further unnecessary delay is not fair to the developer, the residents, and certainly not to the downtown businesses who have been impacted by construction and the associated traffic, dust and noise. The council therefore stepped up to the task for which we are responsible, and we voted on each and every designated block and decided on height, density and setback for each of them.”

Moon said that while Wessman is currently planning to build two hotels, he has agreed not to build a third—at least not for a while.

“Wessman Development has agreed not to build a third hotel, currently described as a JC Marriott, until the members of the downtown hotel association have two years of occupancy over 62 percent,” Moon said. “That is a request made by the other hoteliers, which our Planning Commission has publicly supported, as well as the City Council. Nobody, least of all the other hotel owners, want to saturate the market.”

As for what Deertrack called the “elephant in the room”: What would happen to the city funds given to Wessman if he or Pougnet were ultimately prosecuted?

Moon said he did not know the answer to that question, and that he would forward the query to City Manager David Ready. Ready, in turn, forwarded the question to City Attorney Doug Holland.

“The developer’s obligations are secured by a performance deed of trust, and in the event the developer defaults on its obligations, the city has the right to exercise its rights under the performance deed of trust, and ultimately force a sale of the property for which financing has not been secured, and building permits have not been issued,” Holland said “This is the city’s primary enforcement tool.

“The city has acquired the parking structure and certain lots, and therefore, the payments for these assets would not be part of any default. Two properties have been released from the performance deed of trust (the Kimpton parcel on Block C-1 and the “West Elm” building on Block A) because these properties were fully financed, and building permits were issued. The remainder of the project is still subject to the performance deed of trust.

In other words … since the Kimpton and West Elm properties have been released, the city would have no real recourse regarding those parcels should criminal charges be filed.

Published in Local Issues

I first met Debra Ann Mumm and Ryan “Motel” Campbell in the weeks leading up to the party the Coachella Valley Independent threw last October to celebrate the launch of our monthly print edition.

Debra’s Venus Studios Art Supply sponsored the event at Clinic Bar and Lounge by donating a 10-by-5-foot canvas (and other materials), on which Campbell painted a gorgeous work of art during the party. (The painting was then donated to the LGBT Community Center of the Desert for the nonprofit’s Center Stage silent auction.)

To say I was impressed by both Mumm and Campbell would be an understatement: They always display an intense passion for the Coachella Valley, its art and its artists.

That’s why I was not at all surprised when Mumm announced she and Campbell were raising funds for PLANet Art Palm Springs (www.exhibitps.com), a project to bring in four renowned muralists in early April to create four murals on and around downtown Palm Springs’ Arenas Road.

From what I know of Mumm and Campbell, I was sure they’d dot their I’s and cross their T’s when it came to planning, permits and permissions. Sure enough, they got a thumbs-up from the city’s Public Arts Commission, as well as all of the needed permissions from the property owners along Arenas Road. Since the city of Palm Springs has no law regulating murals—at least that Mumm or anyone else to whom the Independent has spoken can find—it seemed like clear sailing for PLANet Art.

Such was not the case: As the PLANET Art artists began to paint on the weekend of April 4, police showed up and reportedly threatened to arrest them if they didn’t stop.

Brian Blueskye has a comprehensive report that we posted online yesterday, and will be our May print-edition cover story. That issue will hit streets next week.

There is some good news coming out of this mess: In May, the Palm Springs City Council is slated to take up the mural matter, and will hopefully develop a policy and procedures to prevent such problems from happening in the future. (We’ll definitely keep everyone posted on what happens.)

But even if the city of Palm Springs gets its act together in May, that does not excuse the city for what happened to Mumm, Campbell and the other PLANet Art participants in April. Unless there is some law or statute that everyone is missing, the city officials who had a role in stopping PLANet Art—costing Mumm and Campbell no small amount of money—should be ashamed. If there’s no law regulating murals on the books, and Mumm and company did everything possible to get proper permission—including getting an endorsement from a city commission—then what they did is legal. Period.

People like Mumm and Campbell, who are stepping up and trying to make our community a more beautiful, culturally aware place, should be celebrated, not threatened with arrest. This seems like common sense doesn’t it? Alas, the city of Palm Springs was lacking any and all sense when it shut down PLANet Art.

Published in Editor's Note